Bombay High Court Quashes Recovery of Excess Salary from Retired Employee; Directs Pension Refixation and Payment of Benefits with Interest. Recovery impermissible as excess payment made for over five years and employee belongs to Class III, applying principles from State of Punjab v. Rafiq Masih.

Writ petition under Article 226 of Constitution challenging recovery of alleged excess salary paid to a retired employee and seeking pension refixation and other benefits.

Petitioner sought quashing of recovery communication dated 08.04.2022, direction to fix pension on last drawn pay as Junior Engineer, grant of pay scale revisions, additional increment, and interest on delayed payment of retiral benefits.

Respondent No.3 issued recovery order dated 08.04.2022 after petitioner's retirement, alleging excess salary paid due to erroneous grant of time-bound promotional pay scale from 2003 because petitioner did not pass departmental qualifying examination.

No previous court decisions; impugned administrative communication dated 08.04.2022.

Whether recovery of excess salary from a retired Class-III employee after 18 years is permissible in law? Whether petitioner is entitled to pension fixation on the basis of last drawn pay as Junior Engineer and not on the lower post of Civil Engineer Assistant? Whether petitioner is entitled to benefits of pay scale revisions under Government Resolutions and interest on delayed payment of retiral benefits?

Petitioner contended that he was granted time-bound promotion in 2004, had the requisite qualification of I.T.I. in Civil Draftsman, was later promoted as Junior Engineer and retired in 2021; recovery after retirement is illegal, arbitrary, and contrary to law laid in State of Punjab v. Rafiq Masih; pension must be fixed on last drawn pay; undertaking given is not binding when recovery is iniquitous. Respondents contended that petitioner did not pass prescribed departmental qualifying examination and hence time-bound promotional pay scale was erroneously granted; petitioner had furnished undertakings for any overpayment recovery; claim for additional increment is barred by limitation; reliance placed on High Court of Punjab and Haryana v. Jagdev Singh and Walmik Sitaram Sirsath v. State of Maharashtra.

Recovery of excess salary from a retired employee belonging to Class-III service, where excess payment was made for more than five years before the recovery order, is impermissible in law. The principles laid down in State of Punjab v. Rafiq Masih apply; an undertaking given by the employee cannot override these equitable principles. The employer's delay in detecting the error and the employee's changed status as a pensioner make recovery iniquitous. Pension must be fixed on the basis of the last drawn pay of the substantive post held at retirement. Interest on delayed retiral benefits is payable at the rates prescribed by the Court.

Rule 8 of the Public Works Department Manual, 1984 stipulates that Tracers appointed after 17/07/1976 are not entitled to exemption from passing the prescribed departmental qualifying examination merely on attaining the age of 45 years. In State of Punjab and Ors. etc. v. Rafiq Masih (White Washer) etc., (2015) 4 SCC 334 this Court held that while it is not possible to postulate all situations of hardship where payments have mistakenly been made by an employer, in the following situations, a recovery by the employer would be impermissible in law: (i) Recovery from employees belonging to Class III and Class IV service (or Group 'C' and Group 'D' service). (ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery. (iii) Recovery from employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued. The officer to whom the payment was made in the first instance was clearly placed on notice that any payment found to have been made in excess would be required to be refunded. The officer furnished an undertaking while opting for the revised pay scale. He is bound by the undertaking.

Petitioner appointed as Tracer on 27/09/1991. By order dated 21/05/2004, respondent No.2 granted time-bound promotional pay scale of Rs.4500-125-7000 w.e.f. 05/10/2003. Petitioner absorbed as Civil Engineer Assistant w.e.f. 20/12/2001 by order dated 21/12/2005. One additional increment granted by order dated 06/04/2006. State Government issued Resolution dated 28/07/2009 revising pay scale. Petitioner promoted as Junior Engineer on 06/07/2021. Petitioner retired on 31/12/2021. Respondent No.3 issued recovery communication dated 08/04/2022. Petitioner filed Writ Petition No. 4782 of 2023 before Bombay High Court, Nagpur Bench.

• Public Works Department Manual, 1984: Rule 8
• Constitution of India: Article 226